By William Jones, Contributing Reporter

RIO DE JANEIRO, BRAZIL – Despite a staggering decline in car sales at the end of last year, January represented the strongest month of its kind, breaking a nationwide record for the number of car sales during what is usually a gloomy month for the automotive market.

Brazil January Car Sales Up Amid Slump, Rio de Janeiro, Brazil News
Over the last ten years the number of cars in Brazil has increased by 123 percent, photo by Marcelo Camargo/ABr.

According to data published by industry specialist researchers ANFAVEA, the National Association of Vehicle Manufacturers, car sales plummeted almost twelve percent between December 2013 and January 2014 after having experienced a boom of 16.8 percent in the previous month. However, figures show that the 312,600 sales made represent the best January on record as it is 0.4 percent above what the market sold a year ago.

Record sales in December last year were propelled by holiday discounts and tax breaks. Market insiders suggest that the statistical growth is driven by President Dilma Rouseff’s domestic manufacturing tax cuts, introduced in 2012, in order to boost production and encourage demand. The tax cuts allegedly protect domestic jobs and appear to have so far proven successful in what could otherwise be a flailing industry amid an economic slowdown.

According to Brazil’s Finance minister, Guido Mantega, the tax will be reintroduced “gradually” over the coming year. Car and dealerships have started to brace themselves for market stagnation. Furthermore, experts from international news agency, Reuters, believe that within the next decade, sales will slow considerably and grow by as little as three percent per year, a stark contrast from the high growth period experienced in the past few years.

Brazil, the world’s fourth largest car market, attracts some of the planet’s biggest auto makers, such as Italy’s Fiat, Germany’s Volkswagen and U.S.-based manufacturers, such as General Motors and Ford. Italian manufacturers Fiat remained Brazil’s top seller in January with just over 63,000 sales compared to Volkswagen, with around 56,000 in second and General Motors making just over 53,500 sales in third place.

Read more (in Portuguese).

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